Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 1 of 14 PageID# 10690
`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 1 of 14 Page|D# 10690
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`EXHIBIT 4
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`EXHIBIT 4
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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 2 of 14 PageID# 10691
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`UNITED STATES
`INTERNATIONAL TRADE COMMISSION
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`In the Matter of Investigation No.
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`CERTAIN TOBACCO HEATING ARTICLES 337-TA-1199
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`AND COMPONENTS THEREOF
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`Pages:
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`Place:
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`Date:
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`1396 through 1603
`Washington, D.C.
`February 1, 2021
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`HERITAGE REPORTING CORPORATION
`Official Reporters
`1220 L Street, N.W., Suite 206
`Washington, D.C. 20005
`(202) 628-4888
`contracts@hrccourtreporters.com
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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 3 of 14 PageID# 10692
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` 1405
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` 1 regulation of tobacco and nicotine products.
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` 2 JUDGE CHENEY: Any objection?
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` 3 MR. BAYUK: No objection from Complainants, Your
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` 4 Honor.
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` 5 MS. SLADIC: No objection from the Staff.
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` 6 JUDGE CHENEY: Hearing no objection, Ms. Ehrlich
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` 7 will be recognized as an expert in the field of FDA law and
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` 8 regulation of tobacco and nicotine products.
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` 9 Please proceed, Mr. Grant.
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` 10 MR. GRANT: Thank you very much, Your Honor.
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` 11 BY MR. GRANT:
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` 12 Q. Now, have you ever testified as an expert in any
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` 13 kind of a court case before?
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` 14 A. No, I have not, although I have been approached
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` 15 a few times in the past.
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` 16 Q. Okay. Well, if you've been approached in the
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` 17 past and you haven't testified, I can only surmise that you
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` 18 said no. If that's true, why did you say yes in this case?
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` 19 A. Yeah, I -- I decided to participate in this case
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` 20 because I do believe it's essential to public health for
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` 21 smokers to have access to a wide variety of potentially
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` 22 reduced risk products that have been evaluated and
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` 23 authorized by FDA. IQOS is -- is one of only two products
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` 24 that has been both PMTA and MRPT authorizations from FDA,
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` 25 and, as a result, I think it is important to public health
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`Heritage Reporting Corporation
`(202) 628-4888
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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 4 of 14 PageID# 10693
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` 1406
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` 1 to maintain access to IQOS.
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` 2 Q. Okay. Well, let's talk about MRTPs. What is
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` 3 the purpose of an MRTP?
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` 4 A. An MRTP application is intended to obtain a
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` 5 modified risk tobacco product authorization from FDA.
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` 6 Q. And what are the two types of MRTPs?
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` 7 A. So there's only one MRTP, a modified risk
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` 8 tobacco product. All products authorized under that
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` 9 pathway are considered modified risk tobacco products.
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` 10 However, there are two kinds of orders that you can get
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` 11 under the MRTP provision.
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` 12 You can get a risk modification order or an
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` 13 exposure modification order.
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` 14 Q. Okay. And just so we're clear for the Court,
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` 15 what type of MRTP order did the FDA grant IQOS?
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` 16 A. IQOS has an exposure modification order.
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` 17 Q. Okay. Now, last week when court was ongoing,
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` 18 did you have the opportunity to listen to the testimony of
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` 19 Reynolds' experts, Dr. Murrelle and Mr. Clissold?
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` 20 A. I did.
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` 21 Q. Okay. And what's your reaction to
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` 22 Dr. Murrelle's characterization that shoe polish could get
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` 23 a reduced exposure MRTP?
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` 24 A. I think that's preposterous. And I think
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` 25 Mr. Clissold would agree with that. Obviously, the MRTP
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`Heritage Reporting Corporation
`(202) 628-4888
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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 5 of 14 PageID# 10694
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` 1414
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` 1 Q. Okay. Why does it take so long to obtain a
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` 2 PMTA?
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` 3 A. It's just -- there's a -- there's a lot of data,
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` 4 a lot of, you know, information in there and it has to be
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` 5 reviewed by many different disciplines at FDA. So it's a
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` 6 very, very rigorous review that -- you know, it just -- it
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` 7 takes a very long time.
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` 8 Q. Okay. We can take down the FDA authorization of
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` 9 IQOS.
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` 10 I'd like to turn to e-cigarettes now. So that
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` 11 the Judge has it clear in his mind, have any e-cigarettes
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` 12 whatsoever received a PMTA authorization?
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` 13 A. No, none.
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` 14 Q. Okay. Now, from a regulatory perspective, are
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` 15 e-cigarettes IQOS substitutes?
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` 16 A. I don't believe so. In fact, they're all
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` 17 illegal currently. There are no legally marketed
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` 18 e-cigarettes right now. Some are covered by FDA's
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` 19 enforcement discretion policy under the Maryland District
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` 20 Court order in the American Academy of Pediatrics case, but
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` 21 none are legally marketed.
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` 22 Q. Okay. So we've talked a little bit about this
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` 23 American Academy of Pediatrics. Can you give the Judge a
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` 24 little bit more background on the case and what led to its
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` 25 filing?
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`Heritage Reporting Corporation
`(202) 628-4888
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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 6 of 14 PageID# 10695
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` 1415
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` 1 A. Sure. So -- so deemed products when -- when the
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` 2 Deeming Rule became effective, they were all required to go
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` 3 through pre-market authorization, but at the same time, FDA
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` 4 announced an enforcement discretion policy that allowed the
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` 5 products to stay on the market while FDA, you know, got the
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` 6 basics in place to accept PMTAs and then while they
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` 7 reviewed.
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` 8 So the -- there was a deadline for the PMTAs,
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` 9 and that deadline changed multiple times and was pushed
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` 10 back repeatedly. And, finally, some stakeholders,
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` 11 including the American Academy of Pediatrics and some
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` 12 individual pediatricians, started getting really concerned
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` 13 about FDA's inaction in light of the, you know,
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` 14 skyrocketing use of -- youth use of e-cigarettes, which
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` 15 they viewed as -- as a significant public health problem.
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` 16 So they sued FDA to try to -- to basically force
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` 17 the agency to fulfill its legal obligations.
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` 18 Q. Okay. And what did the federal judge in
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` 19 Maryland, Judge Grimm, find?
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` 20 A. Yeah, he observed that -- that the industry was
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` 21 purposefully avoiding the pre-market requirements and
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` 22 shortened that compliance period by almost two years.
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` 23 Q. Okay. Did the judge make any findings on
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` 24 whether youth use of e-cigarettes was a public health
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` 25 problem?
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`Heritage Reporting Corporation
`(202) 628-4888
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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 7 of 14 PageID# 10696
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` 1416
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` 1 A. Yeah, the judge focused a lot on that issue. It
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` 2 found that there was an epidemic-level rise in -- in youth
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` 3 use of e-cigarettes, and it observed that this was a clear
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` 4 public health crisis.
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` 5 Q. Okay. In light of those findings, what did the
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` 6 judge order in the case?
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` 7 A. So the judge ordered that all applications
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` 8 needed to be submitted by September 9th, 2020, and for
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` 9 timely filed PMTAs, they could stay on the market while FDA
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` 10 reviewed any pending PMTAs for up to one year.
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` 11 Q. Okay. Per the court's order, when does that
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` 12 one-year grace period begin?
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` 13 A. The -- the beginning of that one-year grace
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` 14 period is -- is the -- the application's filing.
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` 15 Q. Okay. Does the FDA's sort of discretionary
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` 16 level of enforcement impact in any way the status of
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` 17 products that are sold that are not in compliance with the
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` 18 Maryland District Court's order as being either lawful or
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` 19 unlawful?
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` 20 A. No. All -- like I said, all e-cigarette
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` 21 products are illegal products. And those that are not
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` 22 covered by the Maryland court's enforcement discretion
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` 23 policy are subject to immediate enforcement and -- and are
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` 24 not permitted on the market.
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` 25 Q. Now, we had some witnesses testify that the
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`Heritage Reporting Corporation
`(202) 628-4888
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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 8 of 14 PageID# 10697
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` 1417
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` 1 Reynolds Vuse Solo PMTA was filed in October of 2019. Just
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` 2 so we're crystal clear, when does the one-year grace period
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` 3 imposed by the federal court expire?
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` 4 A. For that product, it expired in October of 2020,
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` 5 this past October.
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` 6 Q. Okay. Now, is this Maryland case ongoing?
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` 7 A. Well, the -- the court retained jurisdiction
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` 8 over the case to ensure that he could take further action,
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` 9 if necessary.
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` 10 Q. Okay. Now, from a regulatory perspective,
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` 11 what's the -- what's the status of the sort of U.S.
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` 12 e-cigarette market?
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` 13 A. It's extremely uncertain. You know, the former
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` 14 commissioner, Dr. David -- FDA commissioner, Dr. David
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` 15 Kessler, you know, has observed the uncertainty, as has --
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` 16 and -- and Dr. Clissold, the Complainant's FDA expert, has
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` 17 acknowledged that there's a lot of uncertainty.
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` 18 Q. Okay. And have you provided a demonstrative
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` 19 that sort of summarizes those uncertainties?
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` 20 A. Yes.
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` 21 Q. Okay. Let's pull up RDX-11.1. Is this what you
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` 22 were referring to?
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` 23 A. Yes.
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` 24 Q. Okay. Let me walk you through this or let you
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` 25 walk the Judge through this, is the better way to put it.
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`Heritage Reporting Corporation
`(202) 628-4888
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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 9 of 14 PageID# 10698
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` 1419
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` 1 You know, I think -- I think they will start
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` 2 taking enforcement action at some point. We just don't
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` 3 know when. And, you know, the other thing that -- and they
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` 4 have -- actually, they have been taking enforcement action
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` 5 against products in this category. But the other unknown
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` 6 that is on this demonstrative is this youth use problem is
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` 7 still a real significant concern for the agency and for a
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` 8 lot of stakeholders.
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` 9 Q. Some people have testified that this enforcement
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` 10 issue isn't a concern at all. Can I ask you, is there any
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` 11 chance that the FDA simply chooses to ignore its
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` 12 obligations and not exercise its enforcement powers?
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` 13 A. No, the FDA has indicated what its enforcement
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` 14 priorities are and it has been taking enforcement action.
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` 15 Q. Okay. We can take that down. Let's pull up
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` 16 RX-324, if we can. And can you tell the Judge what this
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` 17 exhibit is, Ms. Ehrlich?
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` 18 A. That's FDA's guidance on its enforcement
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` 19 priorities for illegally marketed e-cigarettes and other
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` 20 products.
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` 21 Q. Okay. And we heard about a deficiency letter
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` 22 that Reynolds had received. Let me ask you this question:
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` 23 Has the FDA sent out any letters to enforce that court's
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` 24 September 2020 deadline?
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` 25 A. Sure, yeah. The FDA has sent a number of
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`Heritage Reporting Corporation
`(202) 628-4888
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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 10 of 14 PageID# 10699
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` 1420
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` 1 warning letters. In fact, this past Friday, it sent
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` 2 another bolus of warning letters against illegally marketed
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` 3 e-cigarette products. So I think there are at least 22
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` 4 that FDA has issued since the September 9th deadline.
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` 5 Q. Okay. Putting aside the federal FDA, are there
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` 6 any other authorities that can and are taking enforcement
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` 7 action against e-cigarettes?
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` 8 A. Yeah, for example, the U.S. Federal Trade
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` 9 Commission has a study undergoing the marketing of
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` 10 e-cigarette products, and I believe that Complainants have
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` 11 been ordered to submit data and information to that
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` 12 investigation.
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` 13 State and local authorities have been, you know,
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` 14 really concerned about these products and have -- and many
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` 15 have banned flavored products in their jurisdictions.
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` 16 Congress held a hearing on youth use of e-cigarettes at
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` 17 which the Reynolds U.S.A. CEO, I believe, testified about
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` 18 the youth abuse problem.
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` 19 So there -- there's a lot of concern on those
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` 20 fronts and a lot of inspected -- expected enforcement from
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` 21 state and local authorities and -- and from the import --
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` 22 enforcement upon import, of a lot of these products.
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` 23 Q. Okay. We can take that down. Let's pull up, if
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` 24 we can, JX-39. And let me ask you, Ms. Ehrlich, to
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` 25 describe for the Judge what JX-39 is.
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`Heritage Reporting Corporation
`(202) 628-4888
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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 11 of 14 PageID# 10700
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` 1429
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` 1 billing rate, under the terms of your retainer for this
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` 2 investigation?
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` 3 THE WITNESS: Well, I think my -- the rate is in
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` 4 my report, so you can look at my report to see my rate.
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` 5 BY MR. BAYUK:
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` 6 Q. Okay. I guess not to lose the point of where I
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` 7 wanted to go --
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` 8 A. It's less -- it's less than what your FDA expert
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` 9 is being compensated, I noticed that.
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` 10 Q. You're not doing this for free, are you,
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` 11 Ms. Ehrlich?
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` 12 A. No, sir.
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` 13 Q. Okay. Let me switch gears and ask you some
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` 14 questions about PMTAs and the standard for PMTAs. We've
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` 15 heard this term, I can't remember if you used it, but
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` 16 certainly you're familiar with the term "appropriate for
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` 17 the protection of public health," right?
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` 18 A. Of course.
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` 19 Q. Okay. And that's the standard in the statute
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` 20 that governs the -- the authorization of PMTAs, right?
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` 21 A. Correct.
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` 22 Q. Okay. Now, FDA has never published a list of
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` 23 requirements that are needed to get PMTA authorization, has
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` 24 it?
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` 25 A. Well, that's a little complicated. So as you
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`Heritage Reporting Corporation
`(202) 628-4888
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`

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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 12 of 14 PageID# 10701
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` 1430
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` 1 may have heard references from FDA to foundational rules,
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` 2 one of the reasons why FDA initially delayed the deadline
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` 3 for submission of PMTAs is because it wanted to have in
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` 4 place its foundational rules for PMTAs. And, in fact,
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` 5 those foundational rules were sent to the office of the
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` 6 Federal Register on January 19th and placed in the
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` 7 pre-publication review.
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` 8 And so we all -- I reviewed those closely.
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` 9 Unfortunately, because of the administration change, those
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` 10 regulations, because they had not yet been published in the
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` 11 Federal Register, were withdrawn by the new administration.
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` 12 So that document does, in fact, list the information
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` 13 required for PMTA review very -- very clearly. It's
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` 14 possible that it will be republished by this
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` 15 administration, but we just don't know at this point.
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` 16 Q. Let me ask you about some language you used just
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` 17 a few months ago in your deposition. Tell me if you recall
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` 18 these words.
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` 19 "FDA has not issued any list of requirements for
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` 20 a PMTA order," right?
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` 21 A. That's what I testified to at the time, yes.
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` 22 Q. Okay. And this standard, appropriate for the
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` 23 protection of public health, in your view that is a vague
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` 24 standard that can be interpreted in various different ways
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` 25 by FDA, true?
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`Heritage Reporting Corporation
`(202) 628-4888
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`

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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 13 of 14 PageID# 10702
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` 1451
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` 1 You talked about this enforcement discretion
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` 2 policy and the timeline that FDA is operating under to
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` 3 review these -- these applications.
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` 4 You agree that unless FDA decides to take
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` 5 enforcement action, it allows these products, these ENDS
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` 6 products, to remain on the market and to be sold, right?
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` 7 A. Well, there are plenty of other entities that
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` 8 could take action against these products, and state and
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` 9 local authorities have been quite active in the area. And
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` 10 a lot of these products have been blocked at the border.
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` 11 There's an import alert for unauthorized e-cigarette
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` 12 products that -- that has been issued and there have been
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` 13 quite a number of import detentions.
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` 14 In December, there was a huge seizure of
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` 15 e-cigarette products upon importation. I think it covered
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` 16 at least 33,000 products. So in addition to FDA
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` 17 enforcement, there are a lot of other ways that these
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` 18 products can -- can be removed from the -- the market or
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` 19 blocked from the market. In fact, state and local
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` 20 authorities, a lot of them have banned flavored products
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` 21 from the marketplace, which is a huge percentage of these
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` 22 products.
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` 23 Q. Let me ask you -- let's pull up your deposition.
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` 24 This is page 266. And I want to ask you about testimony
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` 25 that appears at lines 16 to 23 on this page, 266, lines 16.
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`Heritage Reporting Corporation
`(202) 628-4888
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`

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`Case 1:20-cv-00393-LO-TCB Document 477-3 Filed 03/11/21 Page 14 of 14 PageID# 10703
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` 1603
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` 1 CERTIFICATE OF REPORTER
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` 2 TITLE: Certain Tobacco Heating Articles
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` 3 INVESTIGATION NO: 337-TA-1199
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` 4 HEARING DATE: February 1, 2021
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` 5 LOCATION: Washington, D.C. - Remote
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` 6 NATURE OF HEARING: Evidentiary Hearing
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` 7 I hereby certify that the foregoing/attached
` transcript is a true, correct and complete record of the
` 8 above-referenced proceedings of the U.S. International
` Trade Commission.
` 9 Date: February 1, 2021
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` 10 SIGNED:
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` 11 Signature of the Contractor of the
` Authorized Contractor's Representative
` 12 1220 L Street, N.W, Suite 206
` Washington, D.C. 20005
` 13
` I hereby certify that I am not the Court Reporter
` 14 and that I have proofread the above-referenced transcript
` of the proceedings of the U.S. International Trade
` 15 Commission, against the aforementioned Court Reporter's
` notes and recordings, for accuracy in transcription in the
` 16 spelling, hyphenation, punctuation and speaker
` identification and did not make any changes of a
` 17 substantive nature. The foregoing/attached transcript is a
` true, correct and complete transcription of the
` 18 proceedings.
`
` 19 SIGNED:
` Signature of Proofreader
` 20
` I hereby certify that I reported the above-referenced
` 21 proceedings of the U.S. International Trade Commission and
` caused to be prepared from my tapes and notes of the
` 22 proceedings a true, correct and complete verbatim recording
` of the proceedings.
` 23
` SIGNED:
` 24 Signature of the Court Reporter
`
` 25
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`
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`Heritage Reporting Corporation
`(202) 628-4888
`
`